Companies

China's Telestone Q2 profit falls, shares slump

(Agencies)
Updated: 2010-08-13 10:39

China's Telestone Technologies Corp's second-quarter profit fell 15 percent, hurt partly by higher operating expenses as the developer of telecom networks technology shifted focus to high-margin wireless fiber-optic systems, sending its shares down 20 percent in extended trade.

In the second quarter, the company increased sales and marketing efforts to secure higher-margin wireless fiber optic distribution system (WFDS) projects and installations. Revenue from WFDS installations accounted for about 21 percent of revenue in the first half of the year.

Telestone reported second-quarter net income of $1.7 million, or 16 cents a share, compared with $2 million, or 19 cents a share, in the previous year.

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Revenue rose 37 percent to $16.6 million. Operating expenses more than doubled to $5.3 million.

In the first half of the year, China Mobile accounted for 63.4 percent of Telestone's revenue, China Unicom 21 percent and China Telecom 13.3 percent.

Telestone reaffirmed its 2010 outlook for profit of $22.9 million on revenue of $129.4 million.

Shares of the company, which have gained about 44 percent in the last one month, tumbled to $10.85 in trading after the bell. They closed at $13.59 Thursday on Nasdaq.